Normal aging results in declines in a variety of cognitive domains, including executive-control and mnemonic processes, which are critical for successfully performing many everyday tasks. The fact that these declines are not uniform across persons suggests that the rate of decline is potentially alterable. Therefore, identifying the factors that enable some elders to preserve their cognitive function is an important goal of cognitive aging research. Hemodynamic evidence suggests that some aging individuals may be able to deal with declines by compensating, i.e., recruiting brain regions and presumably mental processes not used by young adults. However, the compensation hypothesis is frequently invoked on a post hoc basis and is, therefore, vague in terms of which persons need to compensate, which conditions and tasks elicit compensation and the nature of the processes that are engaged. Therefore, to enable a better understanding of individual differences, we use the Cognitive Reserve hypothesis, which posits that reserve factors (measured by proxies such as intellectual status, IQ, and socio-economic status, SES) may enable some older adults to withstand the deleterious effects of cognitive decline more successfully than others. Hence, we embed the issue of compensation within the larger domain of cognitive reserve. Thus, the proposed studies focus on providing additional information on both the reason for individual differences in decline and the nature of the cognitive processes recruited when compensatory activity is engaged. The role of cognitive reserve will be assessed by categorizing young and older adults as either low or high on reserve factors (i.e., IQ and SES) and on the basis of their episodic memory performance (low, high). This will help determine whether individual differences in cognitive reserve account better for compensatory activity than individual differences in task performance. To provide information on the nature of the specific cognitive processes underlying compensatory brain activity, cognitive demand, a variable that might lead individuals to compensate at high levels, will be parametrically manipulated. Further, the recording of ERPs during task performance should provide timing information about the nature of these compensatory processes and reveal important information about the stages at which they aid task-related processes. Specifically, a major aim is to test a series of hypotheses that compensatory brain activity during memory formation and retrieval represents recruitment of cognitive-control processes, presumably mediated by the prefrontal cortex, and brought on line to counter age-related decline in brain function. ERP and performance data will be obtained from young (20-30), young-old (60-70) and old-old (71-85) adults, which will help determine the trajectory of age-related declines. By varying the level of cognitive control required in each of five proposed episodic memory tasks and, thereby, the need to increment cognitive-control processes, we will be able to determine which types of individuals within our older-adult samples are likely to produce compensatory brain activity and the circumstances under which such compensation will occur.